French defence minister in India to salvage Rafale deal

24th February 2015, 0 comments

France's defence minister on Tuesday held talks with his Indian counterpart in a fresh attempt to seal a troubled deal to sell 126 Rafale fighter jets.

Jean-Yves Le Drian met his counterpart Manohar Parrikar behind closed doors during a brief visit to New Delhi aimed at preventing the collapse of the sale, which has been snagged for three years and now faces new questions over cost.

France is hoping to salvage the deal ahead of a visit to Paris by Prime Minister Narendra Modi in April, but neither side would immediately be drawn on whether any progress was made in Tuesday's talks.

French company Dassault Aviation won the right in January 2012 to enter exclusive negotiations with India to supply 126 Rafale fighters, with experts saying a final deal could be worth $12 billion.

The idea is for Dassault to supply 18 of the twin-engine fighters later this year while the remaining 108 would be made by state-run Hindustan Aeronautics Ltd under technology transfer agreements with India.

But negotiations have proved fraught, both under Modi's government and its Congress predecessor, while a committee looking into the deal has reportedly found that it was not the cheapest option.

Le Drian's visit comes a week after France signed an agreement with Egypt for the first foreign sale of its Rafale fighters, which it hopes will prompt others to snap up its premier combat jet.

Paris is also eyeing possible deals with Qatar and Malaysia, although the Rafale has lost out to foreign competitors in South Korea, Singapore, Morocco, Switzerland and Brazil.

France's defence ministry said before Le Drian's arrival late Monday that the talks would give the governments a chance to discuss "international affairs and defence industry issues", but there was little doubt the Rafale would dominate proceedings.

Modi's right-wing government, which won power in elections last May, has been blowing hot and cold about the progress of discussions.

While his government has pledged to push forward with purchases which stalled under Congress, Modi wants to end India's status as the world's number one defence importer and to have 70 percent of hardware manufactured domestically by the turn of the decade.

A defence ministry spokesman said during Le Drian's visit in December that outstanding differences "would be resolved in a fast-track manner".

But the government has also commissioned a report about the project costs, adding yet more uncertainty.

Speaking at an air show in Bangalore last week, Parrikar said he expected the contract negotiation committee (CNC) to submit its report within weeks.

"I have asked the CNC to speed up the process of completion of the report for us to take a decision on the acquisition of Rafale," he told reporters.

Le Drian arrived in New Delhi late Monday and will leave on Tuesday afternoon after meeting Parrikar.